HECS-style loan proposal for paid parental leave slammed as a 'tax on children'

By
JOSHUA BUTLER

July 7, 2014, 8:53 p.m.

Suggestions that paid parental leave could be replaced with a university-style loan to be repaid have been described as "a tax on children".

Krystal McKenna, of Koonawarra, with children Amelie and Arron, fears that parenting would get even tougher. Picture: CHRISTOPHER CHAN

Suggestions that paid parental leave could be replaced with a university-style loan to be repaid have been described as "a tax on children".

A report released on Monday by the Centre for Independent Studies floated a "Parental Leave Contribution Scheme", where families would receive a loan for the wages of the primary caregiver for up to 26 weeks. Parents would then repay the loan once they returned to work and started earning over $31,538.

"The objectives of [paid parental leave] would be better met by a loans scheme similar to the Higher Education Contributions Scheme," the Fairer Paid Parental Leave report states.

Families earning $50,000 a year would have 4 per cent of their income directed to CPI-indexed loan repayments. Those earning $92,000 would pay 8 per cent of their pay check. The report states a typical high-income family would take four years to repay the loan.

Greg Golledge, industrial officer at the United Services Union, slammed the notion.

"Women are put in a position where they have to work, because it's hard to have a mortgage and children unless the family has two jobs," Mr Golledge said.

"This adds another burden onto parents. It's a tax on children."

New mums Krystal McKenna, of Koonawarra, and Ciemara Williams, of Cringila, have both benefited from the government's current parental leave scheme, which provides up to 18 weeks of minimum wage. Both said a loan scheme would make parenting even harder.

"I don't think it's fair. We've got a lot of bills as it is, and I'm going back to work to pay those," Ms McKenna said.

"Me and my husband will cover the bills but not much else. I couldn't afford to pay back maternity leave - it would make things a lot more difficult."

Ms Williams said her family budget was already stretched without having to pay up to 8 per cent of their income on repaying a loan.

"We do very thorough budgeting, but when I go back to work I'll have to pay for childcare, and there will be such a small amount left over from that already without cutting into it any further," she said.

Do you think a HECS-style loan for parents to stay home with a new baby is a good idea? Let us know in the comments section below.